The Most Entrepreneurial Metropolitan Area?

Abstract

Research has established a link between young firms and job creation. This has generated great levels of interest about entrepreneurship in local areas and questions about where are startups located in the United States. That is, what city is the most entrepreneurial? Is it Silicon Valley? New York? Boston? Seattle? Perhaps Austin? These cities are the common answers. In truth, up until now we haven’t really known the answer, because the hard data were not available. Startup data were available for the U.S. states, but for cities, we had to use proxies like self-employment or data on small businesses. Data about startups at the local level did not have an empirical signature - there simply has not been data about firms and their age to this point. However, available to the public for the first time, federal government data now allows us to look at startups at the metropolitan area level.

In this paper, we identify forty metropolitan areas, each some of the largest of their type, with high startup densities, and discuss their trends over the past two decades. Some of the metros are the usual suspects, like parts of Silicon Valley and New York, but we wager there are many areas in the United States that many have overlooked. The measure we use makes it difficult to identify high-impact startups, or the popular high-tech sectoral focus. There is other work we point to for these sorts of analyses, mainly work with the Inc. 500 and recent work on startup density in the tech sectors. For our purposes, though, this data gives us a broad picture of startups and a look at entrepreneurship at a level of granularity never before available.